Microsaic Regulatory News (MSYS)

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

THIS ANNOUNCEMENT, WHICH DOES NOT CONSTITUTE A PROSPECTUS, A PROSPECTUS EQUIVALENT OR AN ADMISSION DOCUMENT, DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SECURITIES OF MICROSAIC SYSTEMS PLC.

NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE PROHIBITED BY ANY APPLICABLE LAW.

5 June 2018

Microsaic Systems plc("Microsaic" or the "Company")

Fundraising

Microsaic Systems plc (AIM: MSYS), the developer of point of need mass spectrometry, is pleased to announce it has conditionally raised £5.1 million before expenses through a placing of 255,000,000 new ordinary shares of 0.25 pence each in the Company (the "Placing Shares"), at a price of 2 pence per share (the "Placing Price") (the "Placing"). The Placing Price represents an 11.1 per cent discount to the closing mid-market price on 4 June 2018, being the last business day prior to this announcement.

The Company highly values its retail investor base and will today separately announce the launch of an offer for subscription to raise up to £0.4 million via PrimaryBid (the "PrimaryBid Offer" and, together with the Placing, the "Fundraising"). A further announcement will be made shortly in connection with the PrimaryBid Offer which will remain open until, at the latest, 9.00 p.m. tonight. The PrimaryBid Offer has been fully underwritten by N+1 Singer and the minimum gross proceeds from the Placing and PrimaryBid Offer (the "Fundraising") will be £5.5 million1.

The net proceeds of the Fundraising are expected to be approximately £5.0 million after expenses, and will be used to complete the development of the Company's technology with an existing partner in bioprocessing, to commercialise this and other opportunities in bioprocessing, and to continue to further enhance the Company's miniaturised mass spectrometer instruments to ensure its continued competitiveness and open additional market opportunities. In addition, by having a strengthened balance sheet, the Directors believe that the Company will be in a stronger position to negotiate commercial partnerships.

The Placing is conditional on, inter alia, the Directors' participation and the passing of the Special Resolution to be proposed at the General Meeting to be held at 10.00 a.m. on 22 June 2018 at the offices of N+1 Singer, One Bartholomew Lane, London, EC2N 2AX. A circular (the "Circular"), which will provide further details of the Placing and the PrimaryBid Offer and include a notice convening the General Meeting, is expected to be sent to shareholders on 6 June 2018.

Related Party Transactions

Parkwalk Advisors Funds is a substantial shareholder in the Company holding in aggregate 54,154,838 Existing Ordinary Shares representing 29.9 per cent. of the voting rights and consequently Parkwalk Advisors Funds is considered to be a related party pursuant to Rule 13 of the AIM Rules. Parkwalk Advisors Funds is subscribing for 70,000,000 Placing Shares in the Placing at the Placing Price, representing 27.5 per cent. of the Placing Shares which will result in it holding 27.2 per cent. of the Enlarged Issued Share Capital immediately following Admission. The participation by Parkwalk Advisors Funds constitutes a related party transaction for the purposes of the AIM Rules.

In addition, the Directors of the Company have indicated their intentions to subscribe for an aggregate of 3,500,000 Placing Shares, representing approximately 1.4 per cent. of the Placing Shares. Immediately following Admission, the Directors are expected to hold together an aggregate of 11,478,743 Ordinary Shares, representing 2.5 per cent. of the Enlarged Issued Share Capital, as set out in the table below:

The participation by the Directors of the Company in the Placing will constitute a related party transaction for the purposes of the AIM Rules.

As there are no independent directors (for the purposes of the Fundraising) to provide a fair and reasonable statement because all of the Directors are participating in the Placing, N+1 Singer (in its capacity as nominated adviser to the Company for the purposes of the AIM Rules) considers that the participation by Parkwalk Advisors Funds and the expected participation by the Directors in the Placing are fair and reasonable insofar as the Shareholders are concerned.

Expected Timetable

Terms used but not defined in this announcement shall have the meanings given to such terms in the Circular. This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 ("MAR"). In addition, market soundings (as defined in MAR) were taken in respect of the Fundraising with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

Contacts:

About Microsaic Systems

Microsaic Systems plc (AIM: MSYS) is a high technology company developing chip-based, bench-top and point-of-analysis mass spectrometry ("MS") instruments that are designed to improve the efficiency of pharmaceutical R&D. The Company is working with established global life science companies to co-develop new solutions to improve productivity in the development of small molecule and novel biologic (peptides, antibodies) medicines. MS is a powerful method of analysis to enable earlier decision making relating to product identification, purity and bioactivity, and is the analytical technique of choice for biochemists across many industry sectors.

Microsaic's core product, the 4500 MiD®, is a robust and compact MS system, retaining the functionality of larger conventional MS systems, is easier to use by non-specialists, consumes less energy and has lower running costs. For more information, please go to www.microsaic.com.

ADDITIONAL INFORMATION

Reproduced below without material adjustment is an extract from the Chairman's letter to Shareholders, the full text of which will be contained within the Circular expected to be posted to Shareholders tomorrow.

1. INTRODUCTION

On 5 June 2018, the Board was pleased to announce the proposed conditional Transaction comprising: (i) the Placing to raise approximately £5.1 million; and (ii) the PrimaryBid Offer to raise up to approximately £0.4 million. In total, therefore, the proceeds receivable by the Company from the Transaction (before expenses) amount to approximately £5.5 million. The net proceeds of the Transaction receivable by the Company are approximately £5.0 million.

The net proceeds of the Transaction will provide the Company with additional capital to accelerate the commercialisation of its business and to provide balance sheet strength to support commercial negotiations, recruitment and retention of key staff, development of new products and enhancements to existing products.

The Company is seeking the authority of Shareholders to provide the Directors with authority to allot and issue the New Ordinary Shares and to disapply pre-emption rights in relation to the issue of the New Ordinary Shares. The Special Resolution to be proposed at the General Meeting is set out in the Notice.

The Transaction is conditional, inter alia, on: (i) the passing by Shareholders of the Special Resolution at the General Meeting which will give the Directors the required authority to disapply statutory pre-emption rights in respect of the allotment of, and to allot, the New Ordinary Shares; and (ii) Admission having become effective by no later than 8.00 a.m. on 25 June 2018 (or such time and date as the Company and N+1 Singer may agree, being no later than 11.00 a.m. on 9 July 2018). Subject to all relevant conditions being satisfied (or, if applicable, waived), it is expected that the New Ordinary Shares will be issued and admitted to trading on AIM on or around 25 June 2018.

The Offer Price is at a discount of 11.1 per cent. to the closing middle market price of 2.25 pence per Existing Ordinary Share on 4 June 2018 (being the last practicable date before publication of the circular).

The purpose of the circular is to outline the reasons for the Transaction and explain why the Directors consider the Transaction to be in the best interests of the Company and its Shareholders as a whole and, therefore, why the Directors recommend that you vote in favour of the Special Resolution at the General Meeting, as the Directors intend to do in respect of their direct holdings.

In its 2017 Annual Report and Financial Statements, the Company reported that in order to implement the planned pace of development to benefit fully from opportunities in the bioprocessing market, the Board believed that the Company would need to raise further funds in the future. The purpose of the Transaction is to raise these funds in order to assist the Company to realise its commercial objectives. In the event that Shareholders do not approve the Special Resolution or the Transaction does not proceed for any other reason, pursuit of the Company's current commercial objectives would require funds from alternative sources, which the Board believes may be difficult to secure and, even if secured, are likely to be on terms significantly detrimental to existing Shareholders. If funds were not available, the Board would have to consider other options which it believes would also be significantly detrimental to existing Shareholders when compared with the Transaction. Such options could include, for example, significantly reducing the Company's expenditure, which would materially diminish its ability to develop its products to meet market needs. It is, therefore, of the utmost importance that Shareholders vote in favour of the Special Resolution.

2. COMPANY OVERVIEW

About the Company

Founded in 2001, Microsaic is a high technology company which develops point-of-need mass spectrometers ("MS"), designed to improve the efficiency of chemical and biological workflows.

The Company was initially established to develop miniaturised MS instruments based on micro-electro-mechanical systems (MEMS) technology originating at the Optical and Semiconductor Devices Group, part of the highly regarded Electrical and Electronic Engineering faculty at Imperial College, London.

The Company has been based at headquarters in Woking, UK since September 2004 and was admitted to AIM in April 2011.

Since being established in 2001, the Company has invested substantially in core intellectual property specific to its miniaturised MS, with over 60 patents in chip based, compact MS. The Company is revenue generating, with over 130 instruments sold to date.

Products

The Company's core products, the compact MiD series of mass detectors, are designed to integrate

seamlessly with a wide range of third party original equipment manufacturers ("OEMs") or to be standalone products sold through distributors. At the forefront of the Company's design ethos is to deliver fast, easy to use, powerful and robust performance.

Commercial focus

The Company is focussing on opportunities in high-value biologic drug manufacture (i.e. bioprocessing), plus growth in its traditional small molecule markets. In the longer term the Company would like to focus on other high growth markets such as point of care diagnostics.

The Directors believe that the Company has a significant opportunity for its point of need MS in bioprocessing. In 2017, following successful completion of a feasibility phase ("Phase one"), the Company entered an integration phase ("Phase two") with one of the foremost players in the global market for scientific instrumentation.

Traditional MS is a time-consuming technique; typically, MS instruments are held in centralised laboratories which may be remote from the bioprocessing location and turn-around times for analysis can take weeks.

The Directors believe that the Company's point of need, compact MS can provide analyses in minutes, versus days or weeks in the case of other MS products, and will provide cumulative time savings in analysis, which can help to reduce the time to market for new biologic drug candidates and speed up manufacturing of these drugs. Point of need MS can measure biologics in-situ, in minutes per analysis, of which there maybe hundreds per annum.

In addition to bioprocessing, the Company has opportunities in its traditional small molecule markets through the integration of its MS technology with multiple OEM partners, and via distributors across North America, Europe and Asia Pacific.

The market

The demand for biologic drugs is estimated to reach revenues of approximately $445 billion by 2019, and in 2016 eight out of the top ten selling drugs by revenue were biologics. Biologics are very large, complex molecules and are generally grown in living cells where the process is difficult to control, whereas traditional small molecules are produced by chemical synthesis, which is a predictable process where identical copies can be made. The Directors believe that the Company's MS is well suited to the analyses of these complex biologic molecules. Market analysis carried out in respect of 2016 has indicated that the demand for biologic drugs meant that an estimated 40-100 new line installations were taking place at any one time in the biopharma industry. Point of need MS not only combines the technique of measuring biologics, but also enables faster analyses during regulatory compliance, helping to accelerate the time to bring drugs to clinical trials and to market. The Directors believe that the total market for bioprocessing equipment is currently in the region of $15 billion from the top suppliers into the pharmaceutical industry.

The Directors believe that compared with other so-called compact MS technologies, the Company is the only provider to offer a true "all-in-one" footprint, especially designed for ease of use and maintenance, and for ease of integration with OEM equipment and production workflows. The Company's technology is currently the only compact MS which enables whole monoclonal antibody identification, with its "3200 mass to charge" specification.

3. USE OF PROCEEDS

As at 31 December 2017, the Company's cash balance was £3.2 million and as at 31 May 2018 the cash balance was £1.9 million. The net proceeds from the Transaction will be used to complete the development of the Company's technology with an existing partner in bioprocessing, to commercialise this and other opportunities in bioprocessing, and to continue to further enhance the Company's miniaturised MS instruments to ensure its continued competitiveness and open additional market opportunities. In addition, by having a strengthened balance sheet, the Directors believe that the Company will be in a stronger position to negotiate commercial partnerships.

During the period to 31 December 2020, the Directors anticipate using funds as set out in the table below:

The above numbers are the Company's internal targets and are not forecasts.

4. CURRENT TRADING AND PROSPECTS

Current trading

In 2012, the Company started a collaboration with one of the foremost players in the global market for scientific instrumentation. Contractual development started in 2016, and Phase one (technical feasibility) was successfully completed in late 2017. Phase two (integration) was initiated in December 2017 and the Directors believe this phase will be completed in late Q4 2018. The partner provides co-development income and dedicated project resource. Subject to commercial terms being agreed, a final "commercialisation" phase ("Phase three") would follow, which the Directors estimate would last approximately 18 months, with a target completion in H1 2020.

The current collaboration is focussed on one area of the bioprocessing workflow; however, the Directors believe that there are multiple points of entry for the Company's MS to be used in a typical bioprocessing workflow, representing considerable potential upside to the Company's target revenue.

The key drivers in the pharmaceutical and biopharmaceutical markets include:

· growth in prescription drugs - the Company's key end market is pharmaceutical analysis;

· increasing drug complexity - techniques like MS are needed for complex biologic analysis suiting the opportunity in bioprocessing; and

· increasing regulation - MS can accelerate compliance.

The Company is also working with two established institutions to generate data to support a wider use of the Company's MS in bioprocessing. The Directors intend to use this data to support discussions with other potential partners in this area.

The Company is making good progress in its traditional small molecule markets. It has an existing relationship with Gilson Inc. and has so far, in 2018, signed OEM agreements with Unimicro Technologies (founded in the United States, but for sales in China) and Knauer Wissenchaftliche Gerate (based in Germany, but for distribution worldwide). It has also, in 2018, signed distribution agreements with Rightek, for distribution in Taiwan, and Stable Arm Sdn. Bhd. for distribution in Malaysia. The Company has a number of discussions underway with further OEMs and distributors in North America, Europe and Asia Pacific and many of these represent potential new application or geographic areas for the Company.

Targets

Having assessed potential prospects in the bioprocessing and traditional small molecule markets, the

Directors have set internal targets for 2022 of sales of approximately 390 to 450 MS instruments and

revenues of between £17 million to £19 million. The Directors have estimated that approximately 70 per cent. would come from the bioprocessing market in 2022 and the balance would come from the

Company's traditional small molecule market. The targeted revenues include recurring revenue in the form of consumables and service fee income.

The above numbers are the Company's internal targets only and are not forecasts.

Longer term, potential sales opportunities

The Directors believe that the Company has a number of longer-term potential sales opportunities. These include the following:

· the use of the Company's compact point of need MS technology across multiple entry points in the bioprocessing workflow;

· potential use in other biologic-related markets requiring on-line process monitoring, such as cell therapies;

· potential use of compact MS as a method for point of care diagnostics; and

· potential collaboration on the next generation of compact MS leveraging the Company's proof of concept "triple quad" technology.

The Board intends to seek partnerships to fund the development of these sales opportunities in the future when it is appropriate to do so.

5. INFORMATION ON THE PLACING

Details of Placing

The Company has conditionally raised approximately £5.1 million before expenses by the conditional

placing of Placing Shares at the Offer Price to Placees. The Placing is conditional, inter alia, on: (i) the

Special Resolution being passed without amendment at the General Meeting; (ii) the Company allotting, subject only to Admission, the Placing Shares in accordance with the Placing Agreement; (iii) the admission of the Placing Shares to trading on AIM becoming effective by no later than 8.00 a.m. on 25 June 2018 (or such other time and/or date, being no later than 11.00 a.m. on 9 July 2018, as N+1 Singer and the Company may agree; (iv) the conditions in the Placing Agreement being satisfied or (if applicable) waived; and (v) the Placing Agreement not having been terminated in accordance with its terms prior to Admission.

The Placing Shares, if and when issued, will be credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all future distributions, declared, paid or made in respect of the Ordinary Shares from the date of Admission. The Placing Shares will represent approximately 55.9 per cent. of the Enlarged Issued Share Capital.

Application will be made for the Placing Shares to be admitted to trading on AIM. It is expected that

Admission will occur and dealing will commence at 8.00 a.m. on 25 June 2018 at which time it is also expected that the Placing Shares will be enabled for settlement in CREST.

It is expected that CREST accounts of the Placees who hold their Ordinary Shares in CREST will be credited with their Placing Shares on 25 June 2018. In the case of Placees holding Ordinary Shares in certificated form, it is expected that certificates will be dispatched during the week commencing 25 June 2018.

The Placing is not being underwritten.

Details of the PrimaryBid Offer

On 5 June 2018, the Company announced that it was proposing to raise up to £0.4 million (before expenses) under the PrimaryBid Offer. The PrimaryBid Offer, which took place between 4.46 p.m. on

5 June 2018 and 9.00 p.m. on 5 June 2018, was made in accordance with an available exemption

against the requirement to produce an FCA approved prospectus.

The PrimaryBid Offer was underwritten in full by N+1 Singer. The PrimaryBid Offer was open to private retail investors subscribing via PrimaryBid.com and the allocation of New Ordinary Shares was filled on a "first come, first served" basis. Completion of the PrimaryBid Offer is conditional on the Placing being or becoming wholly unconditional and not being terminated before Admission (as the case may be). The circular does not constitute an offer in respect of the PrimaryBid Offer (which closed on 5 June 2018 at 9.00 p.m.).

The New Ordinary Shares to be issued pursuant to the PrimaryBid Offer will be free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares.

6. PLACING AGREEMENT

The Company has entered into the Placing Agreement with N+1 Singer, pursuant to which N+1 Singer has agreed (as the Company's agent) to use reasonable endeavours to procure placees for the Placing Shares at the Offer Price. The Offer Price represents a discount of approximately 11.1 per cent. to the closing mid-market price of an Ordinary Share on 4 June 2018, being the latest practicable date prior to the publication of the circular.

The Placing Agreement provides, inter alia, for the payment by the Company to N+1 Singer of a corporate finance fee, an underwriting fee and of commissions based on the gross funds raised by the Company through the Transaction.

The Placing Agreement contains customary warranties given by the Company to N+1 Singer as to matters relating to the Company and its business and a customary indemnity given by the Company to N+1 Singer in respect of liabilities arising out of or in connection with the Placing. N+1 Singer is entitled to terminate the Placing Agreement in certain circumstances prior to Admission, including circumstances where any of the warranties are found not to be true or accurate or to be misleading in any respect or on the occurrence of certain force majeure events.

The Placing Shares are not being offered to the public and are not being offered or sold in any jurisdiction where it would be unlawful to do so.

7. DIRECTORS' SHAREHOLDINGS

Each of the Directors will participate in the Placing. The Directors have conditionally agreed to subscribe for an aggregate of 3,500,000 Placing Shares, representing approximately 1.4 per cent. of the Placing Shares. Immediately following Admission, the Directors will together hold an aggregate of 11,478,743 Ordinary Shares, representing 2.5 per cent. of the Enlarged Issued Share Capital, as set out in the table below:

The above excludes the following unexercised options over Ordinary Shares held at the date of this

document by the following Directors: (i) Peter Grant, options over 3,500,000 Ordinary Shares, (ii) Glenn Tracey, options over 2,300,000 Ordinary Shares; (iii) Bevan Metcalf, options over 2,120,000 Ordinary Shares; and (iv) Chris Buckley, options over 75,000 Ordinary Shares.

8. RELATED PARTY TRANSACTIONS

The Directors' aggregate participation in the Placing, as set out above, constitutes a related party transaction pursuant to Rule 13 and Rule 16 of the AIM Rules.

Parkwalk Advisors Funds is a substantial shareholder in the Company holding in aggregate 54,154,838 Existing Ordinary Shares representing 29.9 per cent. of the voting rights and consequently Parkwalk Advisors Funds is considered to be a related party pursuant to Rule 13 of the AIM Rules. Parkwalk Advisors Funds is subscribing for 70,000,000 Placing Shares in the Placing at the Offer Price, representing 27.5 per cent. of the Placing Shares which will result in it holding 27.2 per cent. of the Enlarged Issued Share Capital immediately following Admission. This subscription constitutes a related party transaction for the purposes of the AIM Rules.

As there are no independent directors to provide a fair and reasonable statement because all of the

Directors are participating in the Placing, N+1 Singer (in its capacity as the Company's nominated adviser for the purposes of the AIM Rules) considers that the participation in the Placing by the Directors and Parkwalk Advisors Funds is fair and reasonable in so far as the Shareholders are concerned.

9. RISK FACTORS

As well as general risks associated with investment in shares, there are a number of risks which are specific to the Company. If any of these risks were to materialise, the Company's business, financial condition, results or future operations could be materially adversely affected. In such cases, the market price of the Company's shares could decline and an investor may lose part or all of their investment.

In addition to the risks set out in the Company's 2017 annual report and financial statements, the Board considers the following additional factors as risks specific to the Company:

The Transaction may not complete

The Placing and the PrimaryBid Offer are and will each be conditional on, and accordingly the Transaction as a whole is and will be conditional on, amongst other things, the passing of the Special Resolution to be proposed at the General Meeting. Shareholders should be aware that if the Special Resolution is not approved at the General Meeting, the Transaction will not proceed.

Should the Transaction not proceed and without access in the near term to alternative finance of an

amount of similar size to that of the Transaction, the working capital available to the Company will not be sufficient for the Board to pursue its current strategy and the Directors would have to consider other options which it believes would be significantly detrimental to existing Shareholders when compared with the Transaction. Such options could include, for example, significantly reducing the Company's expenditure, which would materially diminish its ability to develop its products to meet market needs.

Business strategy may change

The future success of the Company will depend on the Directors' ability to continue to implement effectively its business strategy. In particular, the pursuit of that strategy may be affected by, inter alia, changes in government legislation, regulatory environment or changes in the competitive environment in the markets in which the Company currently operates or expects to operate. If such changes were to materialise, the Directors may decide to change certain aspects of the Company's strategy. This might entail the development of alternative products and services, which would place additional strain on the Company's capital resources and may adversely impact on the revenues and profitability of the Company.

Dependence on key partner

A large proportion of the Company's turnover from 2020 is expected to be from a key partner. The

Company is working on Phase two (integration) of a three phase development program with this partner. Phase two is expected to complete in H2 2018, and if successful, would potentially be followed by Phase three (commercialisation), which is expected to take approximately 18 months. Failure of the development program at any stage or the loss of this key partner or significant delays to the program could have a material adverse impact upon the Company's business and results of operations.

Reliance on third party manufacturing facilities

The Company's strategy is to fully outsource the assembly of its 4500 MiD mass detector to a third party manufacturer, in order to allow the Company to react more quickly to any future increases in sales volumes. The transition from assembling the unit in house to the third party is expected to be completed by H2 2018. As a result of this strategy, the Company will have a very limited capacity to assemble its products in house and loss of the services of the third party manufacturer could have a material adverse effect upon the Company's business and results of operations. Should it be necessary to find a replacement manufacturer or should there be delays with the current provider, the Company's ability to fulfil sales orders could be adversely affected.

Management of growth

The ability of the Company to implement its strategy requires effective planning and management control systems. The Company's growth plans may place a significant strain on its management and operational, financial and personnel resource. Therefore, the Company's future growth and prospects will depend on its ability to manage this growth, and, if this is not successfully managed, the Company's objectives may not be fulfilled. The value of an investment in the Company is dependent upon the Company achieving the aims set out in the circular. There can be no guarantee that the Company will achieve the level of success that the Board expects.

Use of net proceeds and potential requirement for further investment

The use of net proceeds from the Transaction set out in the circular is based on management's current expectations. Whilst there are some restrictions on the Company's use of net proceeds, it is possible that the Company may deviate from this. Investors will not have the opportunity to evaluate the economic, financial or other information on which the Board bases its decisions on how to use the net proceeds of the Transaction. The failure of the Company's management to apply these funds effectively could harm investor confidence and cause the price of the Ordinary Shares to decline.

In addition, any future expansion, activity and/or business development may require additional capital, whether from equity or debt sources. There can be no guarantee that the necessary funds will be available on a timely basis, on favourable terms, or at all, or that such funds if raised, would be sufficient. If additional funds are raised by issuing equity securities or convertible securities, dilution to the then existing shareholdings may result. Debt funding may require assets of the Company to be secured in favour of the lender, which security may be exercised if the Company were to be unable to comply with the terms of the relevant debt facility agreement. The level and timing of future expenditure will depend on a number of factors, many of which are outside the Company's control. If the Company is not able to obtain additional capital on acceptable terms, or at all, it may be forced to curtail or abandon any planned acquisition opportunities, expansion, activity and/or business development. The above could have a material adverse effect on the Company.

10. GENERAL MEETING

A notice convening the General Meeting for 10.00 a.m. on 22 June 2018 at the offices of N+1 Singer, One Bartholomew Lane, London, EC2N 2AX, is set out at the end of the circular. The business to be considered at the General Meeting is set out in the Notice.

The Company is proposing that Shareholders pass the Special Resolution in order (i) to grant the Directors authority, under section 551 of the Act, to allot Ordinary Shares in connection with the Transaction up to an aggregate nominal amount of £687,500 (being equal for up to 275,000,000 New Ordinary Shares), being the maximum required for the purposes of issuing the New Ordinary Shares, and (ii) to disapply the pre-emption rights conferred by the Act in connection with the allotment pursuant to the Transaction of the New Ordinary Shares.

The authorities to be granted to the Directors by the Special Resolution will be in addition to the authority to allot shares given at the Company's annual general meeting held on 4 May 2018 and will only be used in connection with the Transaction. The authorities to be granted pursuant to the Special Resolution shall expire on 31 December 2018 (unless previously revoked or varied by the Company in a general meeting).

Pursuant to resolutions passed at the Company's last annual general meeting on 4 May 2018, the Directors currently have authority to allot equity securities up to an aggregate nominal value of £151,137, representing one third of the Company's existing issued share capital at the date of the resolution, on a pre-emptive basis.

11. ACTION TO BE TAKEN

A Form of Proxy for use at the General Meeting is enclosed with the circular. Whether or not you intend to attend the General Meeting, you are requested to return the duly completed Form of Proxy to the Company's registrars, Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, B63 3DA as soon as possible and in any event, so as to be valid, to arrive before 10.00 a.m. on 20 June 2018.

Submission of the Form of Proxy does not affect your ability to attend the General Meeting and vote in person, if you wish.

In the event that Shareholders do not approve the Special Resolution or the Transaction does not proceed for any other reason, pursuant of current commercial objectives would require the Company to seek financing from alternative sources, which the Board believes may be difficult to secure and, even if secured, are likely to be on terms significantly detrimental to existing Shareholders. It is therefore of the utmost importance that Shareholders vote in favour of the Special Resolution.

12. RECOMMENDATION

The Directors consider that the Transaction is in the best interests of the Company and its Shareholders as a whole and unanimously recommend that Shareholders vote in favour of the Special Resolution, as they intend to do in respect of their own direct holdings of Ordinary Shares, which in aggregate represent 4.4 per cent. of the Ordinary Shares in issue at 4 June 2018, being the latest practicable date prior to the publication of the circular.

The Transaction is conditional, inter alia, upon the passing of the Special Resolution at the General Meeting. Shareholders should be aware that if the Special Resolution is not approved at the General Meeting, the Placing and the PrimaryBid Offer will not proceed.

IMPORTANT INFORMATION

The information contained in this announcement is for information purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

This announcement does not constitute an offer to sell, or the solicitation of an offer to acquire or subscribe for, Ordinary Shares in any jurisdiction where such offer or solicitation is unlawful or would impose any unfulfilled registration, qualification, publication or approval requirements on the Company or N+1 Singer. The offer and sale of Ordinary Shares has not been and will not be registered under the applicable securities laws of Canada, Australia, Japan, New Zealand, Ireland or the Republic of South Africa. Subject to certain exemptions, the Ordinary Shares may not be offered to or sold within Canada, Australia, Japan, New Zealand, Ireland or the Republic of South Africa or to any national, resident or citizen of Canada, Australia, Japan, New Zealand, Ireland or the Republic of South Africa.

The Ordinary Shares have not been, and will not be, registered under the US Securities Act, or the securities laws of any state or any other jurisdiction of the United States. The Ordinary Shares may not be offered or sold, directly or indirectly, in or into the United States (except pursuant to an exemption from, or a transaction not subject to, the registration requirements of the US Securities Act). No public offering of the Ordinary Shares is being made in the United States. The Ordinary Shares are being offered and sold only outside the United States in "offshore transactions" within the meaning of, and in reliance on, Regulation S under the US Securities Act.

The Ordinary Shares have not been approved or disapproved by the United States Securities and Exchange Commission, any state securities commission in the United States or any other regulatory authority in the United States, nor have any of the foregoing authorities passed on or endorsed the merits of the Placing or the accuracy or adequacy of the information contained in this announcement. Any representation to the contrary is a criminal offence in the United States.

The securities referred to herein have not been registered under the applicable securities laws of Australia, Canada, Japan or the Republic of South Africa and, subject to certain exceptions, may not be offered or sold within Australia, Canada, Japan, New Zealand, Ireland or the Republic of South Africa or to any national, resident or citizen of Australia, Canada, Japan, New Zealand Ireland or the Republic of South Africa.

The distribution of this announcement outside the UK and Ireland may be restricted by law. No action has been taken by the Company or N+1 Singer that would permit (i) a public offer of Ordinary Shares in any jurisdiction or (ii) possession of this announcement in any jurisdiction outside the UK, where action for that purpose is required. Persons outside the UK who come into possession of this announcement should inform themselves about the distribution of this announcement in their particular jurisdiction. Failure to comply with those restrictions may constitute a violation of the securities laws of such jurisdiction.

Members of the public are not eligible to take part in the Placing. This announcement is directed only at persons who are: (a) if in a member state of the European Economic Area ("EEA"), persons who are who are qualified investors, being persons falling within the meaning of article 2(1)(e) of the Prospectus Directive ("Qualified Investors"), or (b) if in the United Kingdom, Qualified Investors who (i) have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (ii) fall within article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the Order; or (c) are persons to whom they may otherwise be lawfully communicated (all such persons together being referred to as "Relevant Persons").

This announcement must not be acted on or relied on by persons who are not Relevant Persons. Persons distributing this announcement must satisfy themselves that it is lawful to do so. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

All offers of the Placing Shares in the EEA will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus. In the United Kingdom, this announcement is being directed solely at persons in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 (as amended) does not apply.

This announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's and/or the Directors' current expectations and projections about future events. These statements, which sometimes use words such as "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by any such forward-looking statement. Statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this announcement is subject to change without notice and neither N+1 Singer nor, except as required by applicable law, the Company assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein. You should not rely on forward-looking statements, which speak only as of the date of this announcement.

N+1 Singer, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as nominated adviser, financial adviser and broker to the Company in relation to the Placing and Admission and is not acting for any other persons in relation to the Placing and Admission. N+1 Singer is not acting for the Company in relation to the PrimaryBid Offer. N+1 Singer is acting exclusively for the Company and for no one else in relation to the matters described in this announcement and is not advising any other person and accordingly will not be responsible to anyone other than the Company for providing the protections afforded to clients of N+1 Singer, or for providing advice in relation to the contents of this announcement or any matter referred to in it. The responsibilities of N+1 Singer as the Company's nominated adviser and broker under the AIM Rules for Companies and the AIM Rules for Nominated Advisers are owed solely to the London Stock Exchange and are not owed to the Company or to any director or shareholder of the Company or any other person, in respect of his decision to acquire shares in the capital of the Company in reliance on any part of this announcement, or otherwise.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by N+1 Singer or by any of its affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.

INFORMATION TO DISTRIBUTORS

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of self certified high net worth individuals and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, N+1 Singer has only procured investors who meet the criteria of professional clients and eligible counterparties or for whom the Placing Shares are otherwise compatible.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.